ICLE Research Cited in Insurance Business Magazine on Oklahoma Insurance Regulation
Insurance Business cited ICLE research by Ian Adams and R.J. Lehmann in a piece examining whether Oklahoma risks repeating California’s experience with insurance market disruption through rate suppression. The article drew on ICLE findings showing that from 2018 to 2022, California had the largest gap between actuarially appropriate rates and state-approved rates of any state in the nation, and used that data to caution against similar regulatory approaches elsewhere.
Read the full piece here.
The result was systematic rate suppression: from 2018 to 2022, California had the largest gap between actuarially appropriate rates and state-approved rates of any state in the nation, according to research by the International Center for Law and Economics. And when insurers cannot charge rates that reflect the risks they carry, the market’s response is not to absorb the losses — it is to leave. As Insurance Business has reported, California’s FAIR Plan — the state-run insurer of last resort — is now carrying a growing load as private carriers retreat not just from wildfire zones but from areas well beyond them. Commissioner Ricardo Lara has warned that “a structurally healthier market is a 3–5-year project,” even after major reforms that began allowing forward-looking catastrophe models and reinsurance cost pass-throughs in rate filings.